Sugar futures rise as supply forecasts shift to deficit and India’s monsoon raises concern
Raw and white sugar futures advanced as analysts revised the 2026/27 global balance toward larger deficits. Traders are also assessing below-average monsoon forecasts in India and the potential effects of El Niño on production in India, Brazil and Thailand.
Sugar futures extend their recovery
Global sugar prices closed higher on Wednesday (5th), supported by expectations of tighter supply in the 2026/27 season and uncertainty over weather conditions in India. Notícias Agrícolas reported that London white sugar reached its highest level in four weeks, while New York raw sugar extended gains recorded since the end of the previous week.
On ICE Futures US, the October raw sugar contract settled at 15.15 US cents per pound, up 11 points. On ICE Europe, October white sugar ended at $476.90 per tonne, an increase of 420 points. The rally followed a five-month low reached the previous Thursday and a series of downward revisions to the global sugar balance.
Forecasts move toward larger deficits
Covrig Analytics on Monday forecast a global deficit of 300,000 tonnes for 2026/27, reversing its previous estimate of a 100,000-tonne surplus. Green Pool Commodity Specialists raised its deficit projection to 3.3 million tonnes from 1.76 million tonnes estimated in June. StoneX now expects a deficit of 1.7 million tonnes, compared with its earlier forecast of 550,000 tonnes.
The estimates differ substantially in scale, but all three revisions point to a tighter market than previously expected. For producers and processors, a sustained deficit could provide firmer price support. Traders and industrial buyers, however, still need to assess how weather conditions affect actual cane yields and the timing of supply from the main producing regions.
India’s rainfall remains a central risk
India’s Meteorological Department said last Friday that monsoon rainfall in August and September was expected to remain below average. The country’s Ministry of Earth Sciences has also warned that this could be the weakest monsoon season in 11 years. India is the world’s second-largest sugar producer, making rainfall developments particularly important for the global balance.
Conditions have nevertheless improved from the sharp shortfall recorded earlier in the season. By 5 August, accumulated monsoon rainfall was 11% below the historical average, according to the Meteorological Department, compared with a deficit of 42% at the end of June. That recovery pressured sugar prices during the previous week by encouraging expectations of higher Indian output.
The risk has not disappeared. India’s weather service reduced its estimate for total seasonal monsoon rainfall to 90% of the historical average from 92%. The prospect of weaker rain during the coming months means that traders will continue to watch whether the recent improvement is sufficient to protect cane production.
El Niño creates mixed implications for producers
El Niño is another source of uncertainty for Brazil, India and Thailand. The US Climate Prediction Center indicated in early July that the event could be among the strongest in recent decades. The World Meteorological Organization expects El Niño to intensify and peak between August and October 2026.
In Brazil’s Center-South, more frequent rain during the second half of the year could support cane development and agricultural productivity. Excess rainfall could also delay harvesting and restrict gains in total recoverable sugar, or ATR. In São Paulo’s physical market, Cepea researchers reported a slight increase in white crystal sugar prices, although liquidity remained limited and buyers continued to purchase selectively. These competing production and harvest effects leave weather data and revised balance forecasts as the main short-term signals for the sugar market.
